Company Watch: Wrangler And Lee’s Argentina Exit To Affect 200 Buenos Aires Workers
Following the announcement that Wrangler and Lee spinoff Kontoor Brands will exit from the Argentinian market in March, 200 employees are faced with uncertainties despite having been given advanced notice of the independent company's plans.
Earlier last year, sources told The Wall Street Journal that VF Corp is considering to either sell Wrangler and Lee or create a spinoff brand. The final decision resulted in the establishment of Kontoor Brands.
According to Fashion United, the company said in a statement sent to local news outlet Minutouno that it provided early notice to its workers in Buenos Aires. "Our 200 employees in Buenos Aires have already been notified that they will no longer have a job from March," they explained.
This is not the first time Wrangler and Lee had to close down a plant. In 2018, Kontoor Brands had to shut down its La Rioja province factory. Around 100 people lost their jobs at that time.
While the jeans brand will no longer operate in Argentina, VF Corporation, Kontoor's mother company, announced that operations for Vans and Timberland will push through in the troubled country, as reported by local news site Modaes Latinoamérica.
The latest announcement came after other companies started seeing slower growth rates in Argentina in 2018. The country's leading textile giant, Alpargatas, spent over a year restructuring due to contractions as a result of the local economy's decline.
Multiple outlets have reported that Argentina is experiencing a financial crisis that has been affecting various industries. The latest data revealed that consumer confidence has hit its lowest since the huge Argentinian economic fallout in 2002.
Meanwhile, VF Corporation figures improved in January. According to data from S&P Global Market Intelligence, the international fashion company's stock climbed 18 percent last month.
The Wrangler and Lee parent company reported that revenue hiked by 8 percent and racked up $3.94 billion in profits. The figures topped previous analyst estimates of $3.87 billion.
The report also highlighted how its Vans brand propelled overall growth as sales soared to 25 percent. According to FOX Business, CEO Steve Rendle said of the developments, "VF's third-quarter results were fueled by strong growth in our largest brands and balanced growth across the core dimensions of our portfolio."
In light of the progress VF Corporation's revenue, the fashion giant raised its 2019 forecast figures. The company predicted a revenue growth rate of up to $13.8 billion for the entire year. Analysts noted that the North Carolina-based firm has a reputation of acquiring other brands, thus driving growth and luring investors into its steadily growing circle.